Asset tracking is the process of systematically monitoring a company’s physical property. This involves tracking the location, status, and condition of valuable items to maintain a comprehensive record of every physical asset a business owns. The process provides organizations with a clear view of their resources from acquisition to disposal.
What Is Considered an Asset
A business asset is any valuable item a company owns to produce goods, provide services, or support operations. These items are recorded on a company’s balance sheet and contribute to its worth.
The two main categories for asset tracking are fixed assets and IT assets. Fixed assets are long-term items not expected to be sold within a year, such as machinery, vehicles, and office furniture. IT assets are a subset of fixed assets and include all technology-related hardware and software like laptops, servers, and smartphones.
The Purpose of Asset Tracking
A primary benefit is preventing loss and theft. Knowing the location of all equipment creates accountability and deters unauthorized removal. This visibility reduces the significant costs associated with replacing lost or stolen items.
Asset tracking also drives operational efficiency. Employees can quickly locate tools and equipment, which minimizes downtime and eliminates wasted labor. By analyzing tracking data, managers can also identify underutilized equipment to be reallocated, preventing unnecessary purchases and maximizing return on investment.
Maintenance scheduling is another area improved by asset tracking. Systems can monitor usage or trigger alerts for routine inspections and preventative maintenance. This proactive approach helps extend the lifespan of machinery and avoids costly breakdowns.
Asset tracking is also a component of regulatory compliance and financial accuracy. Many industries require detailed equipment records for financial audits, calculating depreciation, and filing taxes. These systems provide a verifiable audit trail for every asset to help organizations meet legal and financial obligations.
How Asset Tracking Systems Work
An asset tracking system digitally monitors physical items through a multi-stage process. First, a unique identifier is assigned to each asset by physically affixing a tag, such as a barcode, QR code, or electronic chip. Once tagged, the asset’s information is captured using a corresponding device like a handheld scanner or a dedicated reader. This step links its physical presence to a digital record.
The captured data is then transmitted to a centralized software platform. This software maintains a real-time database where managers can view an asset’s location, check its status, review its history, and schedule maintenance.
Common Asset Tracking Technologies
Barcodes
Barcodes are a cost-effective technology for asset tracking. A barcode is an optical, machine-readable pattern of bars and spaces that a scanner or mobile device reads to identify an asset. Because they are inexpensive, barcodes are suitable for tracking a high volume of items where real-time location is not needed. They require a direct line of sight to be scanned and can be susceptible to wear and tear.
QR Codes
QR codes are a two-dimensional evolution of the barcode, consisting of black squares in a grid. This structure allows them to store more information than a standard barcode, such as a website URL or service history. Like barcodes, QR codes are scanned with an imager but offer greater data storage at a similarly low cost. This makes them a popular choice for IT assets and equipment that may require quick access to detailed information.
Radio-Frequency Identification (RFID)
Radio-Frequency Identification (RFID) uses radio waves to identify and track tags. An RFID system consists of a tag with a microchip and an antenna, and a reader that emits and receives radio waves. RFID tags do not require a direct line of sight and can be read from several feet away.
Passive tags are powered by the reader’s radio waves and have a shorter read range, making them ideal for inventory or documents. Active tags have their own power source, allowing them to broadcast over a larger distance for tracking high-value assets like shipping containers.
Global Positioning System (GPS)
Global Positioning System (GPS) trackers are used for monitoring assets over large geographical distances. These devices use signals from satellites to determine their precise location. A GPS unit attached to an asset, such as a vehicle or heavy machinery, transmits its location data via a cellular or satellite network. This technology is best suited for high-value, mobile assets that operate outdoors, like vehicle fleets or construction equipment.
Bluetooth Low Energy (BLE)
Bluetooth Low Energy (BLE) is a wireless technology for short-range communication. In asset tracking, small, battery-powered beacons are attached to items and continuously broadcast a unique signal. Bluetooth-enabled devices, such as smartphones or dedicated gateways, detect these signals when they come within range. BLE is effective for indoor asset tracking within a defined space like an office, hospital, or warehouse.
Industries That Use Asset Tracking
In the construction sector, companies manage expensive tools and heavy machinery spread across multiple job sites. Asset tracking is used to prevent theft, ensure equipment is available where needed, and avoid project delays caused by misplaced items.
The healthcare industry relies on asset tracking to manage medical equipment. Hospitals must keep track of thousands of mobile assets, from infusion pumps to wheelchairs. Tracking allows staff to instantly locate the nearest available equipment, which improves patient care and helps ensure devices undergo regular maintenance.
For IT departments, managing the lifecycle of technological assets is a significant task. Laptops, servers, and smartphones are constantly being deployed, moved, and retired. IT asset tracking provides a detailed inventory of all hardware, helping to secure sensitive data and streamline equipment upgrades.
In logistics and supply chain management, tracking is fundamental to the business model. Companies monitor the real-time location of vehicle fleets and high-value shipments. This visibility allows for route optimization, accurate delivery estimates, and enhanced cargo security.
Getting Started with an Asset Tracking System
Adopting an asset tracking system begins with a physical audit to identify and list every asset that needs to be tracked. This process involves locating, counting, and recording details for all items, from machinery to IT hardware. This initial inventory creates the baseline dataset for the new system.
With a complete asset list, the next step is to define clear goals. A business should determine the specific problems it wants to solve, such as reducing theft, improving the efficiency of locating equipment, or automating maintenance. Establishing measurable goals will guide the selection of the right technology.
Finally, research and select an appropriate solution based on your assets and objectives. This involves evaluating different tracking technologies and software platforms to find one that aligns with your company’s goals. Comparing vendors based on features, scalability, and cost is the final step before implementation.